An empirical analysis of environmental policy in China

Abstract

As a signatory country of the Paris Agreement, China has adopted environmental policies to assist it in achieving its goals of reaching a peak in carbon emissions by 2030 and achieving carbon neutrality by 2060. As a major carbon emitter, China's reduction of carbon emissions plays an important role in mitigating climate change. Research on the implementation of China's environmental policies helps us to understand the most appropriate formulation of environmental policies in developing countries. Research on the impact of environmental policies on the economy and technology is the key for China to improve its environmental policies and maintain sustainable economic growth.

Purpose: This study aims to use panel data on pollutants, the economy, and technology in China's prefecture-level cities to examine whether and how China's environmental policies affect pollutants, the economy, and technology, and to explore other factors that affect the implementation of environmental policies.

Design/methodology/approach: This study used a range of econometric tools to assess the impact of policy on pollution, economic growth and technological progress. The Difference in Differences (DID) method is an appropriate way to assess the impact of policy. In the chapter 3, this chapter used DID method to test the impact of China's the low-carbon city pilot (LCCP) policy on carbon dioxide (CO2) emissions. The chapter 4 combined the results of the chapter 3 with the Environmental Kuznets Curve (EKC) theory and used generalized method of moments (GMM) method to analyse the impact of China's LCCP policy on the economy and technology. In addition, the chapter 4 also analyses the heterogeneous impact of the LCCP policy on regions with different levels of economic development. The chapter 5 used logit model, panel linear regression model and vector autoregression (VAR) model to test the effect of detailed rules of the Air Pollution Prevention and Control Action Plan (APPCAP) policy and other factors on reducing PM2.5 is empirically analysed.

Findings: Chapter 3 finds evidence to suggest that the implementation of the LCCP policy has had a significant effect on reducing CO2 emissions. This shows that the LCCP policy is effective in reducing CO2. The chapter 4 finds that the LCCP policy did not act as a drag economic growth, but it has positively affected the economic growth rate of the pilot cities. This finding supports the EKC theory. However, there is variation in the economic growth effects of the policy. The LCCP policy had a positive impact on economic growth in the Eastern region, but weakened the economic growth in the Northeast region. The chapter 4 also finds that the LCCP policy promotes technological innovation in the pilot cities. The results of chapter 5 show that scientific and technological innovation and energy consumption adjustment are effective in reducing PM2.5. PM2.5 in core cities have a spillover effect on those in surrounding cities. In addition, the study also found that the threshold set for officials’ promotion eligibility is also effective in reducing PM2.5.

Research limitations/implications: This research is not without limitations. First, due to data limitations, only city-level samples were observed in the empirical research, and no countryside-level samples were observed. Second, the sample scope of this study is limited to China. If the sample size is larger and the data covers developed and developing countries, the results could be generalized to differing types of economy. Third, this study failed to further explore the Chinese political factors in the implementation of environmental policies, including China’s official assessment standards and evaluation system. Expanding the scope of the study will help to understand the implementation of China's environmental policies more comprehensively, and the empirical results of the study will be revised accordingly. Therefore, future research can pay more attention to political factors and other factors that affect the implementation of environmental policies as data becomes available.

Originality/value: This thesis finds that environmental policies reduced CO2 emissions and PM2.5. Unlike previous research, this thesis further analyses the effectiveness of the LCCP policy across different regions of China, enriching the literature on study the LCCP policy. This thesis also examines the impact of threshold set for officials’ promotion eligibility on environmental policy implementation, providing a new perspective for studying environmental policies. This thesis examines the economic and technological impacts of environmental policies. Through empirical analysis, this thesis validates the application of the EKC theory in China, which has helped to develop the EKC theory.

Date of Award	25 Mar 2026
Original language	English
Awarding Institution	University of Bath
Supervisor	Lucy O'Shea (Supervisor) & Bruce Morley (Supervisor)